Explanation Given: Periodic payment is R = $ 179 .40 each month. Interest rate per annum is 4.8% compounded monthly and number of years is 40. Explanation: Interest is compounded monthly. So, i = 1 12 × 4.8 % = 1 12 × 0.048 = 0.004 Number of periods will be n = 12 × 40 = 480 It is a case of an ordinary annuity. Use the formula for the future value of an ordinary annuity: S = R [ ( 1 + i ) n − 1 i ] Here, S is the future value, R is the periodic payment, i is the interest rate per period, and n is the number of periods. Substituting R = $ 179 .40 , i = 0.004 , and n = 480 , the future value of the given annuity will be S = R [ ( 1 + i ) n − 1 i ] = 179

11th Edition

ISBN: 9780321979438

Author: Margaret L. Lial, Raymond N. Greenwell, Nathan P. Ritchey

Publisher: PEARSON

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Chapter 5.2, Problem 49E

To determine

The final amount in a savings account after 40 years.

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Chapter 5.2, Problem 48E

Chapter 5.2, Problem 50E

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Chapter 5 Solutions

Finite Mathematics (11th Edition)

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The final amount in a savings account after 40 years.

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Chapter 5 Solutions